Not only are natural gas industry leaders willing to pay a tax for fracking in Pennsylvania, they have already budgeted to do so, the chairman of the House Democratic Policy Committee told those gathered at Bethlehem Town Hall this afternoon for a hearing on Marcellus Shale.
Rep. Michael Sturla of Lancaster County said industry leaders have, during testimony in front of his committee, said they would not leave Pennsylvania even if the state’s fracking tax is 1 percent higher than the highest gas drilling tax in the country.
“Frankly, they have been more forthcoming than some of our politicians who have said (the industry) would leave," Sturla said. “I don’t think it’s the industry that’s the bad guy. It’s other people who are standing in the way.”
Sturla made the comment less than an hour after Gov. Tom Corbett told a Chamber of Commerce gathering just a few miles away at DeSales University that there “can’t be” a gas drilling tax in Pennsylvania, presumably repeating the theory that taxation will chase investment and jobs away.
Industry representatives were not there to speak for themselves. They were invited, but unable to attend the hearing, Sturla said. But they have spoken of the willingness to pay a tax at previous hearings, the legislator said.
“The political reality is either Gov. Corbett needs a new battery for the hearing aid or he needs a new hearing aid,” said state Rep. Eddie Day Pashinski, a committee member who represents greater Wilkes-Barre. “The industry has said they are willing to pay it, so what’s the problem?”
Pashinski urged those in attendance to pressure their legislators to support a fracking tax. Three Lehigh Valley legislators who attended – Rep. Steve Samuelson, Rep. Bob Freeman and Rep. Joseph Brennan – all said they are in favor of a gas drilling tax.
The committee has gotten behind a proposal by state Rep. Gregory Vitali of Delaware County, who has proposed what amounts to a 5.9 percent severance tax on all gas collected through the fracking process in Pennsylvania.
Vitali, who was at the hearing, said the tax is modeled on West Virginia’s gas drilling tax, but levies at a slightly lesser rate.
The bill sets guidelines on how the fracking tax proceeds would be distributed, with one-third going toward state environmental protection programs, one-third going to help local municipalities to deal with the impacts of gas drilling and one-third going into the state’s general fund.
Vitali estimated that the tax, if adopted for the next fiscal year, would generate $200 million in new state revenue and ultimately climb to $400 million in succeeding years.
Several legislators spoke of the importance of increasing state revenue as Corbett looks at slashing funding for education and environmental protection in Pennsylvania in the next fiscal year budget.
More than 30 people attended the hearing in the rotunda attached to City Hall. Several carried signs venting their opposition to fracking in Pennsylvania. Eight invited people testified, including representatives of three environmental groups, the executive director of the County Commissioners Association of Pennsylvania, the research director of the Pennsylvania Budget and Policy Center and the president of the League of Women Voters of Pennsylvania.
All said they favored taxing gas drilling and most also spoke of possible long-term environmental impacts of fracking, including the heightened levels of methane in drinking water and the unknowns about chemicals that are used in fracking.
Most also said they favored more environmental regulation for the industry and an end to its exemption from local property taxes.
Fracking is the process of hydraulically fracturing underground shale deposits to release valuable natural gas deposits. Water from nearby rivers is mixed with “proprietary” chemicals that are pumped underground to crack the shale.
A recent study published by scientists at Duke University has shown that well water drawn within one kilometer of a fracking natural gas well is likely to have 17 times the level of methane as well water from further away.